PROGRESS SOFTWARE CORP /MA 10-K

Item 9A. Controls and Procedures (a) Evaluation of Disclosure Controls and Procedures Our management maintains disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) under the Securities and Exchange Act of 1934, as amended (the "Exchange Act") that are designed to provide reasonable assurance that information required to be disclosed in our reports filed or submitted under the Exchange Act is processed, recorded, summarized and reported within the time periods specified in the SEC's rules and forms, and that such information is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer (our principal executive officer and principal financial officer, respectively), as appropriate, to allow for timely decisions regarding required disclosure. Our management, including our principal executive and principal financial officers, evaluated the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this Annual Report. Based on this evaluation, we concluded that our disclosure controls and procedures were effective at the reasonable assurance level as of November 30, 2024. (b) Management’s Annual Report on Internal Control over Financial Reporting Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rules 13a-15(f) and 15d-15(f). Because of its inherent limitations, internal control over financial reporting may not prevent or detect all misstatements. Our internal control system was designed to provide reasonable assurance to our management and board of directors regarding the preparation and fair presentation of published financial statements. Our management assessed the effectiveness of our internal control over financial reporting as of November 30, 2024. Our assessment was based on the framework in the updated Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. The Company acquired ShareFile on October 31, 2024. Management excluded ShareFile from its assessment of the effectiveness of the Company’s internal control over financial reporting as of November 30, 2024. This exclusion was in accordance with SEC guidance that an assessment of a recently acquired business’s internal control over financial reporting may be omitted from management’s report on internal control over financial reporting in the year of acquisition of the business. ShareFile represented, in aggregate, approximately 1% of the Company’s total consolidated assets (excluding goodwill and intangibles, which are included in the scope of the assessment) and less than 3% of total consolidated revenues, as of and for the year ended November 30, 2024. Based on our assessment we believe that as of November 30, 2024, our internal control over financial reporting is effective based on those criteria. Deloitte & Touche LLP, our independent registered public accounting firm, which audited our consolidated financial statements, has issued an attestation report on our internal control over financial reporting, which is included in this Item 9A below. (c) Changes in Internal Control over Financial Reporting There were no changes in our internal control over financial reporting during the fiscal quarter ended November 30, 2024 that have materially affected, or are reasonably likely to materially affect our internal control over financial reporting. 72 (d) Report of independent registered public accounting firm REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the stockholders and the Board of Directors of Progress Software Corporation Opinion on Internal Control over Financial Reporting We have audited the internal control over financial reporting of Progress Software Corporation and subsidiaries (the "Company") as of November 30, 2024, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of November 30, 2024, based on criteria established in Internal Control - Integrated Framework (2013) issued by COSO. We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements as of and for the year ended November 30, 2024, of the Company and our report dated January 21, 2025, expressed an unqualified opinion on those financial statements. As described in Management’s Annual Report on Internal Control over Financial Reporting, management excluded from its assessment the internal control over financial reporting of ShareFile, which was acquired during the year ended November 30, 2024 and whose financial statements constitute approximately 1% of total assets (exclusive of acquired intangible assets and goodwill) and 3% of total revenues of the consolidated financial statement amounts as of and for the year ended November 30, 2024. Accordingly, our audit did not include the internal control over financial reporting of ShareFile. Basis for Opinion The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management's Annual Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Definition and Limitations of Internal Control over Financial Reporting A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. /s/ Deloitte & Touche LLP Boston, Massachusetts January 21, 2025 73 Item 9B. Other Information On January 14, 2025, the Board of Directors of the Company approved an amendment to the Company's Bylaws to (i) delegate authority to the Company’s Chief Executive Officer to approve the appointment of certain officer positions, including roles below the executive officer level and (ii) clarify and further enhance procedural mechanics in connection with stockholder nominations of directors, including by requiring a stockholder delivering a nomination notice pursuant to the advance notice provisions of the Bylaws to (A) fully comply with Rule 14a-19 under the Securities Exchange Act of 1934, as amended, and (B) deliver reasonable evidence that such stockholder has met the requirements of Rule 14a-19(a)(3) no later than five business days prior to the applicable stockholder meeting. The foregoing description of the amendment does not purport to be complete and is qualified in its entirety by reference to the Amended and Restated Bylaws filed as Exhibit 3.3 hereto and incorporated herein by reference. (b) Insider Adoption or Termination of Trading Arrangements During the fourth quarter of fiscal year 2024, none of our directors or officers informed us of the adoption or termination of a "Rule 10b5-1 trading arrangement" or "non-Rule 10b5-1 trading arrangement," as those terms are defined in Regulation S-K, Item 408. Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections Not applicable. PART III Item 10. Directors, Executive Officers and Corporate Governance This information will be contained in our definitive proxy statement for the 2025 Annual Meeting of Stockholders, to be filed within 120 days following the end of our fiscal year, and is incorporated herein by reference. Item 11. Executive Compensation This information will be contained in our definitive proxy statement for the 2025 Annual Meeting of Stockholders, to be filed within 120 days following the end of our fiscal year, and is incorporated herein by reference. Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters This information will be contained in our definitive proxy statement for the 2025 Annual Meeting of Stockholders, to be filed within 120 days following the end of our fiscal year, and is incorporated herein by reference. Item 13. Certain Relationships and Related Transactions, and Director Independence This information will be contained in our definitive proxy statement for the 2025 Annual Meeting of Stockholders, to be filed within 120 days following the end of our fiscal year, and is incorporated herein by reference. Item 14. Principal Accounting Fees and Services This information will be contained in our definitive proxy statement for the 2025 Annual Meeting of Stockholders, to be filed within 120 days following the end of our fiscal year, and is incorporated herein by reference. 74 PART IV Item 15. Exhibits and Financial Statement Schedules (a) Documents Filed as Part of this Annual Report on Form 10-K 1. Financial Statements (included in Part II, Item 8 of this Annual Report on Form 10-K): • Report of Independent Registered Public Accounting Firm (PCAOB ID No. 34 ) • Consolidated Balance Sheets as of November 30, 2024 and 2023 • Consolidated Statements of Operations for the years ended November 30, 2024, 2023 and 2022 • Consolidated Statements of Comprehensive Income for the years ended November 30, 2024, 2023 and 2022 • Consolidated Statements of Stockholders’ Equity for the years ended November 30, 2024, 2023 and 2022 • Consolidated Statements of Cash Flows for the years ended November 30, 2024, 2023 and 2022 • Notes to Consolidated Financial Statements 2. Financial Statement Schedules Financial statement schedules are omitted as they are either not required or the information is otherwise included in the consolidated financial statements. (b) Exhibits The Company has filed with this report or incorporated by reference herein certain exhibits as specified below pursuant to Rule 12b-32 under the Exchange Act. Incorporated by Reference Exhibit Number Exhibit Description Form Filing Date Exhibit Filed Herewith 2.1* Stock Purchase Agreement, dated January 3, 2023, between Progress Software Corporation, Vector Maven Holdings, Inc., and Vector Maven Holdings, L.P. 8-K 1/3/2023 2.1 2.2* Asset Purchase Agreement, dated September 9, 2024, by and between Cloud Software Group, Inc. and Progress Software Corporation 8-K 9/9/2024 2.1 3.1 Certificate of Conversion from Non-Delaware Corporation to Delaware Corporation 8-K 5/14/2015 3.1 3.2 Certificate of Incorporation 8-K 5/14/2015 3.2 3.2.1 Certificate of Correction to Certification of Incorporation 10-K 1/29/2016 3.2.1 3.3 Amended and Restated By-Laws, as amended January 14, 2025 X 4.1 Specimen certificate for the Common Stock 10-K 1/30/2012 4.1 4.2 Description of Registered Securities 10-K 1/27/2020 4.2 4.3 Indenture, dated as of April 13, 2021, between Progress Software Corporation and U.S. Bank National Association, as trustee 8-K 4/13/2021 4.1 4.4 Form of 1.00% Convertible Senior Note due 2026 (included as Exhibit A in Exhibit 4.3) 8-K 4/13/2021 4.1 4.5 Indenture, dated as of March 1, 2024, between Progress Software Corporation and U.S. Bank Trust Company, National Association, as trustee 8-K 3/1/2024 4.1 75 Incorporated by Reference Exhibit Number Exhibit Description Form Filing Date Exhibit Filed Herewith 4.6 Form of 3.50% Convertible Senior Note due 2030 (included as Exhibit A in Exhibit 4.5) 8-K 3/1/2024 4.1 10.1** 2002 Nonqualified Stock Plan, as amended and restated 10-K 1/29/2016 10.5 10.2** 2004 Inducement Stock Plan, as amended and restated 10-K 1/29/2016 10.6 10.3** Progress Software Corporation 1991 Employee Stock Purchase Plan, as amended and restated DEF 14A 3/29/2023 Appendix B 10.4** Progress Software Corporation 2008 Stock Option and Incentive Plan, as amended and restated DEF 14A 3/27/2024 Appendix A 10.5** Form of Notice of Grant of Stock Options and Grant Agreement under the Progress Software Corporation 2008 Stock Option and Incentive Plan 10-K 1/29/2014 10.9 10.6** Progress Software Corporation Corporate Executive Bonus Plan 10-K 1/29/2013 10.10 10.7** Progress Software Corporation Compensation Program for Non-Employee Directors X 10.8** Form of Performance-Based Stock Unit Agreement under the Amended and Restated Progress Software Corporation 2008 Stock Option and Incentive Plan 10-K 1/26/2024 10.7 10.9** Form of Deferred Stock Unit Agreement under the Progress Software Corporation 2008 Stock Option and Incentive Plan 10-K 1/29/2014 10.12 10.10** Form of Non-Qualified Stock Option Agreement for Non-Employee Directors under the Progress Software Corporation 2008 Stock Option and Incentive Plan (Initial Grant) 10-K 1/29/2014 10.13 10.11** Form of Non-Qualified Stock Option Agreement for Non-Employee Directors under the Progress Software Corporation 2008 Stock Option and Incentive Plan (Annual Grant) 10-K 1/29/2014 10.14 10.12** Form of Restricted Stock Unit Agreement under the Progress Software Corporation 2008 Stock Option and Incentive Plan 10-K 1/29/2015 10.15 10.13** Employment Agreement, dated October 10, 2016, by and between Progress Software Corporation and Yogesh Gupta 8-K 10/14/2016 10.1 10.14** Employee Retention and Motivation Agreement, dated as of October 10, 2016, by and between Progress Software Corporation and Yogesh Gupta 8-K 10/14/2016 10.2 10.15** Employment Agreement, dated January 16, 2020, by and between Progress Software Corporation and Anthony Folger 8-K 1/17/2020 10.1 10.16** Form of Employee Retention and Motivation Agreement (Amended and Restated as of January 9, 2023) 10-K 1/26/2024 10.15 10.17** Form of Termination Letter (Executive Officers) 10-K 1/27/2020 10.21 10.18** Form of Separation Agreement and Release (Executive Officers) 10-K 1/27/2020 10.22 10.19 Form of 2021 Capped Call Confirmation 8-K 4/13/2021 10.1 10.20 Form of 2024 Capped Call Confirmation 8-K 3/1/2024 10.1 10.21* Fourth Amended and Restated Credit Agreement, dated as of March 7, 2024, by and among Progress Software Corporation, each of the lenders party thereto, JPMorgan Chase Bank, N.A., as Administrative Agent, Bank of America, N.A., Citibank, N.A. and Wells Fargo Bank, N.A., as Syndication Agents, Citizens Bank, N.A., PNC Bank, National Association, Silicon Valley Bank, a division of First-Citizens Bank & Trust Company, and TD Bank, N.A., as Documentation Agents, and JPMorgan Chase Bank, N.A., BofA Securities, Inc., Citibank, N.A. and Wells Fargo Securities, LLC, as Joint Bookrunners and Joint Lead Arrangers 8-K 3/8/2024 10.1 19.1 Insider Trading Policy X 21.1 List of Subsidiaries of the Registrant X 76 Incorporated by Reference Exhibit Number Exhibit Description Form Filing Date Exhibit Filed Herewith 23.1 Consent of Deloitte & Touche LLP, Independent Registered Public Accounting Firm X 31.1 Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 - Yogesh Gupta X 31.2 Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 - Anthony Folger X 32.1† Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 97 Progress Software Corporation Clawback Policy 10-K 1/26/2024 97 101*** The following materials from Progress Software Corporation’s Annual Report on Form 10-K for the year ended November 30, 2024, formatted in iXBRL (Inline eXtensible Business Reporting Language): (i) Consolidated Balance Sheets as of November 30, 2024 and 2023, (ii) Consolidated Statements of Operations for the years ended November 30, 2024, 2023 and 2022, (iii) Consolidated Statements of Comprehensive Income for the years ended November 30, 2024, 2023 and 2022, (iv) Consolidated Statements of Stockholders’ Equity for the years ended November 30, 2024, 2023 and 2022, and (v) Consolidated Statements of Cash Flows for the years ended November 30, 2024, 2023 and 2022. 104 Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) * Certain schedules and exhibits have been omitted from this Exhibit pursuant to Item 601(a)(5) of Regulation S-K. Progress Software Corporation will furnish a copy of any omitted schedule or exhibit to the U.S. Securities and Exchange Commission or its staff upon request. ** Management contract or compensatory plan or arrangement in which an executive officer or director of Progress Software Corporation participates. *** Pursuant to Rule 406T of Regulations S-T, the Interactive Data Files on Exhibit 101 hereto are deemed not filed or part of a registration statement or prospectus of Sections 11 or 12 of the Securities Act of 1933, as amended, are deemed not filed for purposes of Section 18 of the Securities and Exchange Act of 1934, as amended, and otherwise are not subject to liability under those sections. † Furnished herewith. (c) Financial Statement Schedules All schedules are omitted because they are not applicable or the required information is shown on the financial statements or notes hereto. Item 16. Form 10-K Summary None. 77 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, on the 21st day of January 2025. PROGRESS SOFTWARE CORPORATION By: /s/ YOGESH K. GUPTA Yogesh K. Gupta President and Chief Executive Officer Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. Signature Title Date /s/ YOGESH K. GUPTA President and Chief Executive Officer January 21, 2025 Yogesh K. Gupta (Principal Executive Officer) /s/ ANTHONY FOLGER Executive Vice President and Chief Financial Officer January 21, 2025 Anthony Folger (Principal Financial Officer) /s/ DOMENIC LOCOCO Chief Accounting Officer January 21, 2025 Domenic LoCoco (Principal Accounting Officer) /s/ JOHN R. EGAN Non-Executive Chairman January 21, 2025 John R. Egan /s/ PAUL T. DACIER Director January 21, 2025 Paul T. Dacier /s/ RAINER GAWLICK Director January 21, 2025 Rainer Gawlick /s/ CHARLES F. KANE Director January 21, 2025 Charles F. Kane /s/ SAMSKRITI KING Director January 21, 2025 Samskriti King /s/ DAVID A. KRALL Director January 21, 2025 David A. Krall /s/ ANGELA TUCCI Director January 21, 2025 Angela Tucci /s/ VIVIAN VITALE Director January 21, 2025 Vivian Vitale 78